Maarten de Ridder, Coen Teulings, 13 July 2017

Around the world, growth has yet to recover to its pre-Global Crisis trend. This column uses the crisis as a quasi-natural experiment to test the endogenous growth hypothesis, which suggests that output has not recovered because the crisis affected the rate of technological progress. Firms that preferred a bank that was more severely affected by the crisis experienced a large fall in R&D investment and a persistent fall in output in subsequent years. This suggests a direct link between R&D and future productivity, as predicted by endogenous growth models.

Willem Thorbecke, Atsuyuki Kato, 01 July 2017

Since 2007, there have been large changes in the Swiss franc. This column shows that exchange-rate appreciations do not affect the exports, profits, or stock returns of Swiss companies making sophisticated products. In contrast, rises in the franc decrease the exports, profits and stock returns of firms producing medium-high-technology goods. An economy’s production structure is important for weathering exchange-rate fluctuations.

Neil Ericsson, 08 June 2017

Decisions by the Fed's Federal Open Market Committee are based in part on the Greenbook forecasts. These forecasts are produced by the Federal Reserve Board’s staff and are presented to the FOMC prior to their policy meetings, but are not made public for another five years. This column shows that the minutes of those FOMC meetings can help infer the Fed staff's Greenbook forecasts of the US real GDP growth rate, years before the Greenbook's public release. The FOMC minutes are thus highly informative about a key input to monetary policymaking.

Charles R. Hulten, Leonard Nakamura, 02 June 2017

Conventional growth theory characterises innovation as ‘resource-saving’, in the sense that it allows the same output to be produced with fewer resources. This column introduces a sources-of-welfare growth model that also includes a measure of ‘output-saving’ innovation, which arises from the expanded scope and efficiency in consumer choice recently brought about by the Internet economy and smartphones. The findings highlight how various new kinds of intangible capital complicate the measurement of GDP.

Joshua Aizenman, Yothin Jinjarak, Jungsuk Kim, Donghyun Park, 08 January 2016

Peter Chen, Loukas Karabarbounis, Brent Neiman, 05 April 2017

Corporate saving has increased relative to GDP and corporate investment across the world over the past three decades, reflecting how the global decline in the labour has led to increased corporate profits. This column characterises these trends using national income accounts and firm-level data, and relates them to firm characteristics and the accumulation of financial assets. In response to declines in the components of the cost of capital, a model with capital market imperfections generates an increase in corporate saving similar to that found in the data.

Jonathan Portes, Giuseppe Forte, 05 January 2017

The various projections of the impact of Brexit on the UK economy that were produced during the referendum campaign omitted the economic impact of changes in migration to the UK. This column presents plausible scenarios for future migration flows and estimates of the likely impacts. The potential negative impact of Brexit-induced reductions in openness to migration on the UK economy could well equal that resulting from Brexit-induced reductions in trade.

Kristin Forbes, Dennis Reinhardt, Tomasz Wieladek, 23 December 2016

Globalisation is in retreat, but while the slowdown in trade is widely recognised, what is more striking is the collapse of global capital flows. This column shows how banking deglobalisation is a substantial contributor to the sharp slowdown in global capital flows. It finds that certain types of unconventional monetary policy, and their interactions with regulatory policy, can have important global spillovers. Policies designed to support domestic lending may have had the unintended consequence of amplifying the impact of microprudential capital requirements on external lending.

Leandro Prados de la Escosura, 21 December 2016

A new set of historical national accounts for Spain constructs estimates of output and expenditure from 1850 onwards, which means we can estimate the evolution of GDP per capita and labour productivity during this period. This column argues that the data demonstrates that GDP per capita captures long-run trends in welfare in Spain, but not short and medium run trends.

Antonio Fatás, Lawrence Summers, 12 October 2016

Conventional wisdom on supply and demand suggests that demand shocks are cyclical or transitory, and that only technology shocks are responsible for trend changes. This column argues that cyclical events can have permanent effects on demand, and therefore GDP. It is time for policymakers to start considering the possibility of hysteresis seriously.

Brock Smith, Thomas McGregor, Samuel Wills, 28 August 2016

One of the biggest challenges in fighting poverty is to know where it is. This column describes a new way to measure poverty by using satellites to count people who live in darkness at night. This shows that the economic benefits of oil booms don’t trickle down to the very poor.

Maxim Pinkovskiy, Xavier Sala-i-Martin, 26 June 2016

When it comes to measuring GDP, researchers tend to use the latest vintage of the Penn World Tables. However, competing series like the World Development Indicators (WDI) and changing methodologies between vintages mean this is not necessarily the best approach. This column assesses the relative performance of different GDP estimators using night-time lights as an unbiased predictor of the growth rates of unobserved true income. Newer versions of the Penn Tables are not necessarily improvements on their direct predecessors.  Newer versions of the WDI index, especially the 2011 vintage, appear generally better at measuring cross-country income differences.

Diane Coyle, 08 February 2016

Digital technologies are having dramatic impacts on consumers, businesses, and markets. These developments have reignited the debate over the definition and measurement of common economic statistics such as GDP. This column examines the measurement challenges posed by digital innovation on the economic landscape. It shows how existing approaches are unable to capture certain elements of the consumer surplus created by digital innovation. It further demonstrates how they can misrepresent market-level shifts, leading to false assessments of production and growth.

Joshua Aizenman, Yothin Jinjarak, Jungsuk Kim, Donghyun Park, 08 January 2016

Taxation in developing nations has always been difficult, but the Global Crisis has brought further complications. This column examines and compares the tax revenue trends in Asia and Latin America to shed light on some of these issues. Despite their similarities, there is no one-size-fits-all explanation for tax/GDP ratios between the two regions. While progress has been made, the gap between the advanced economies and developing countries offers ample room for improvement. This is particularly important for developing nations as they face growing demand for fiscal spending.

M. Ayhan Kose, Franziska Ohnsorge, Lei (Sandy) Ye, 07 January 2016

Emerging markets face their fifth consecutive year of slowing growth. This column examines the nature of the slowdown and appropriate policy responses. Repeated downgrades in long-term growth expectations suggest that the slowdown might not be simply a pause, but the beginning of an era of weak growth for emerging markets. The countries concerned urgently need to put in place policies to address their cyclical and structural challenges and promote growth.

Kevin Daly, Tim Munday, 28 November 2015

The fallout from the Global Crisis and its aftermath has been deeply damaging for European output. This column uses a growth accounting framework to explore the pre-Crisis and post-Crisis growth dynamics of several European countries. The weakness of post-Crisis real GDP in the Eurozone manifested itself in a decline in employment and average hours worked. However, decomposing growth for the Eurozone as a whole conceals significant differences across European countries, in both real GDP growth and its factor inputs.

Anton Cheremukhin, Mikhail Golosov, Sergei Guriev, Aleh Tsyvinski, 02 September 2015

Economists tend to focus on reforms that came after 1979 when explaining China’s soaring economic growth. This column argues that they shouldn’t. Mao’s policies also had a huge effect and should not be ignored. Economists and policymakers would do well to look further back in history. A long-term perspective might also help them bust a few myths along the way.

Alex Pienkowski, Pablo Anaya, 06 August 2015

During the Global Crisis, sovereign debt-to-GDP ratios grew substantially in the face of shocks to growth, increased fiscal deficits, bank recapitalisation costs, and rising borrowing costs. This column looks at how these various shocks interact with each other to exacerbate or mitigate the eventual impact on debt. Choice of monetary policy regime is an important determinant of how public debt reacts to these shocks.

Chun Chang, Kaiji Chen, Daniel Waggoner, Tao Zha, 01 August 2015

China’s spectacular growth over the 2000s has slowed since 2013. The driving force behind the country’s growth was investment, so the key to understanding the slowdown lies in understanding what sustained investment in the past. This column shows how a preferential credit policy promoting heavy industrialisation explains the trends and cycles in China’s macroeconomy over the past two decades. This policy was not without negative consequences, particularly in terms of the distortions it introduced for business finance. Going forward, China needs to focus on creating the right incentives for banks to make loans to small productive businesses.

Charles Goodhart, Jonathan Ashworth, 08 October 2014

Despite the growth of online and card payments, the ratio of currency to GDP in the UK has been rising. This column argues that rapid growth in the grey economy has been a key cause. The authors estimate that the grey economy in the UK could have expanded by around 3% of UK GDP since the beginning of the Global Crisis.

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